The Sunshine State’s Department of Revenue has awarded millions to businesses performing qualifying Research & Development activities. Are you next?
What business owner would turn away a few thousand dollars or more? The federally-funded Research & Development tax credit is open to many businesses, but only taken advantage of by a small percentage of qualifying companies.
For Florida business owners, R&D presents an opportunity to leverage the activities they’re already doing with a qualified workforce. The key to tapping into this lucrative dollar-for-dollar tax credit is skillfully working through the legal language with a trusted group of tax professionals, and then assessing and documenting your process step-by-step.
How to Monetize Florida Research & Development Activities
Under the guidance of an R&D tax credit expert, qualified industry businesses who pay Florida corporate income tax may apply online through the Florida Department of Revenue in March of each year during tax season. There is also the potential for additional savings, as excess credits may be carried forward up to 5 years.
Florida Research and Development (R&D) Tax Credit works a little differently. For starters, only companies who received the federal R&D credit are qualified to receive the state R&D tax perks. Furthermore, the credit is only available to certain industries that are mostly rooted in hard sciences and technology, including the following:
- Clean Energy
- Life Sciences
- Digital Cloud Technology
- Aviation & Aerospace
- Homeland Security & Defense
- Financial & Professional Services
- Transportation & Distribution
- Additional Manufacturing
Like many other state R&D regulations, the activities must take place in the state – no research activities outside of Florida will qualify. What makes the Florida R&D credit unique is that it is limited to C Corporations only.
Is Your Company Qualified to Receive Florida R&D Tax Credits?
In order for a company to be entitled to Research & Development tax credits, they must adhere to the following state regulations:
- Companies that apply must first be certified by the Department of Economic Opportunity as a qualified target business industry\
- A company must claim the US R&D credit in order to claim the Florida state credit.
- The credit is equal to 10 percent (10%) of the excess of the Qualified Research Expenses (QREs) over the base amount.
- The base amount equals the average of the previous four tax years’ QREs.
- The credit is capped at 50% of a company’s tax liability.
Florida state companies should assess if they are qualified to receive R&D tax credits under the federal guidelines, as this will determine if they can receive the state R&D tax perks as well. National Tax Group tax professionals lead companies through a clear process to see if they qualify for these lucrative dollar-for-dollar benefits. Give our tax specialists a call at (561) 257-3436 to schedule your free initial assessment.